Updated: September 29, 2022
Without emergency relief of $27 million by Monday, Young Brothers says it will face a cash shortfall in the ensuing weeks – “meaning it will be unable to pay its bills or continue funding operations.”
The Public Utilities Commission held an evidentiary hearing to discuss the company’s emergency request for temporary rate relief. The PUC will assess whether the company has demonstrated the probable entitlement and financial need to authorize a temporary increase in rates, fares and charges as requested in YB’s motion.
Company executives say Young Brothers is not seeking a profit of any kind as part of this emergency request.
Jay Ana, President of Young Brothers, LLC said, “Our focus today is on finding a solution. We at this point are entirely focused on a solution, whether it’s through emergency relief or continuing dialogue with state and local agencies. We have had flat or decreases in intrastate cargo volume. That degradation in cargo volume, combined with virtually no significant rate increases over six to eight years, combined with continuing escalating costs have led to our financial situation.”
Ana said the company has not seen a significant rate increase in severeal years. “Our service at this point, the rates do not match the cost of providing that service. It hasn’t for the better part of three or four years. We are not effectively generating the cash and the revenue necessary to operate our business. While we are a utility, we are not immune to the impacts of the pandemic and we are not able to operate if we don’t have cash to manage or pay for our obligations.”
Regarding the working group established by SR. 125, Ana said Young Brothers will “continue to work with all stakeholders and identify potential options in restructuring our business…to ensure we are able to provide a balanced solution and continue to provide our service.”
Young Brothers has also received testimony in support of their motion from industry backers who depend on the service provided.
“Besides us, our more than 200 agricultural, industrial, commercial, diversified energy and water utilities lessees depend on Young Brothers to transport local produce and other goods to markets, to receive their needed materials and equipment,” said Warren H. Haruki, President and CEO, Grove Farm Company. “Without Young Brothers, it would be both cost-prohibitive and virtually impossible to sustain a community on the neighbor islands. Young Brothers is our connection to the world.”
“While Matson has barges to support the movement of interstate cargo, we also rely on Young Brothers to assist in moving cargo to and from all neighbor island ports, especially Moloka‘i and Lāna‘i where the Matson barges are too big to enter the harbor,” said Vic Angoco, Senior Vice President, Pacific, Matson. “Ensuring the survival of our State’s only water carrier is vital to our economy and Matson.”
Since September 2019, Young Brothers has filed more than 13,500 pages in support of its request for a rate increase.
The company has served Hawai‘i for more than 120 years, and employs 370 residents at its facilities across the state.
*Video edit by Wendy Osher.